Bitcoin of America shuts ATMs in Connecticut following scam concerns
- Bitcoin of America has agreed with the Connecticut Department of Banking to cease operations due to lack of licensing.
- During September 2022- March 2023, net crypto ATM installations fell for four months.
Bitcoin [BTC] ATM provider Bitcoin of America has agreed to cease operations due to a lack of licensing with the Connecticut Department of Banking.
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The Department of Banking issued a statement on 21 May, highlighting the failure of Bitcoin of America to secure the required license to operate Bitcoin ATM kiosks in the state. The consent order was imposed, however, after four Connecticut residents lost tens of thousands of dollars in a scam, which utilized the kiosks in question.
The statement read:
“As a result of the consent order, Bitcoin of America made restitution to these consumers totaling $86,000. Following a criminal indictment, Bitcoin of America is winding down operations here in Connecticut.”
Banking Commissioner Jorge Perez warned against the use of unlicensed cryptocurrency kiosks. According to him, investors are frequently persuaded and duped into depositing cash into kiosks and sending an equal quantity of Bitcoins to the scammers.
Bitcoin of America, which allows users to send funds to third parties, must be licensed as a money transmitter. Legislation is being introduced in Connecticut’s state legislature to impose tighter rules and consumer protections, as well as to require the licensing of digital currency kiosks as money transmitters.
In addition, the Connecticut State Police, Department of Banking, Office of the Attorney General, and Connecticut Department of Consumer Protection issued a fraud alert warning against the use of unregistered cryptocurrency and Bitcoin ATMs.
Crackdown leads to decline in crypto ATMs
In March, the authorities seized 52 Bitcoin of America ATMs and kiosks in Ohio after they were suspected of being used in frauds.
Global geopolitical uncertainty, along with a crackdown on unlicensed activities, has had a negative impact on the Bitcoin ATM network. In March alone, 3,627 crypto ATMs went down, the greatest monthly fall in crypto ATM history. During September 2022- March 2023, net crypto ATM installations fell for four months.